by Roger Yu, USA TODAY

by Roger Yu, USA TODAY

A standoff about money could leave 3 million Time Warner Cable customers without the local CBS-owned stations on their cable systems come Thursday.

The two giants have not reached a new deal for "retransmission fees" - the money that cable and satellite TV providers pay TV station owners for the right to carry their signals - as a deadline of 9 a.m. ET Thursday nears.

If the two sides can't strike a deal, the No. 1 prime-time network could be dropped for TWC customers in eight markets nationwide. But the biggest impact would be in three major cities where TWC is the dominant pay-TV provider and CBS owns its local network station - New York, Los Angeles and Dallas.

"It's a thoroughly large deal," said Justin Nielson, an industry analyst at research firm SNL Kagan. "With NFL football and baseball playoffs, it's coming into the big TV season."

Retransmission contracts typically run three to four years. TWC's contract with CBS for the stations it owns - which include stations airing CBS or CW network or independent programming - expired at the end of June. But the parties agreed to an extension through a TV ratings counting period that ends Wednesday, then delayed that deadline until Thursday morning.

"We're really hoping to reach an agreement by that time," said Maureen Huff, a TWC spokeswoman.

The standoff only involves TV stations owned by New York-based CBS Corp. CBS-affiliate stations owned by other broadcasting companies - even if they're in TWC service areas - are not affected by the negotiations.

Nielson estimates TWC now pays CBS about 50 cents to $1 per cable subscriber per month - depending on the station and the markets - for retransmission rights.

TWC has said publicly that CBS wants to raise the fee as much as 600%, though it says that figure is based on an average fee it pays for all CBS stations in service areas. "It's outrageous," Huff said.

Earlier this week, CBS CEO Les Moonves told his employees that the popularity of its programs warrants a big increase. "There are many cable networks - with considerably less viewership - that receive more money for their programming from Time Warner Cable than we do," he wrote in an internal memo obtained by USA TODAY. "In fact, CBS is not even in the top 10 recipients of the programming fees paid out by Time Warner Cable."

Calling TWC "unique in its aggressive approach" to retransmission negotiations, Moonves reminded his troops that CBS will remain "resolute" in its talks and warned them of "a crucial struggle" if its stations go black on TWC.

CBS generated about $250 million in retransmission revenue last year and expects to top $1 billion by 2017.

Huff said concern about rising retransmission fees is hardly confined to TWC. "We're not the only ones," she said. "Everyone is having these problems. The truth is, literally every other distributor has acknowledged the problems created by programmers' rising costs."

Retransmission fees are expected to rise from the estimated $2.36 billion last year to $6.05 billion in 2018, according to SNL Kagan.

The steep rate of the increases has made TV stations attractive acquisition targets and sparked a wave of industry consolidation.

Broadcasters struggled to push retransmission fees higher in the last round of deals a few years back, but faced the recession and a sluggish advertising market. Now, the market is "healthier for broadcasters as they approach negotiations," Nielson said. "These groups are getting larger and have more leverage in these deals."

These stations owned by CBS in these areas could go dark on Time Warner Cable systems. They include stations airing CBS or CW network programming and independent (Ind) stations: